What to do after a layoff, from dealing with your 401(k) and health insurance to negotiating severance
Business Insider
February 22, 2026
AI-Generated Deep Dive Summary
Losing a job can be emotionally overwhelming, but taking proactive steps can help you regain control during this uncertain period. After a layoff, it’s crucial to pause and reflect before making any decisions. Emotional shock is common, so avoid signing documents immediately. Instead, take time to process the situation and seek clarity on severance packages, health insurance options, and unemployment benefits.
Next, focus on rebuilding your career by staying organized and strategic. Update your resume, tailor it to highlight skills and achievements rather than job titles, and consider joining professional networks or support groups for laid-off workers. The job market can be competitive, with the average unemployment duration in the U.S. currently at 5.5 months. This makes it essential to research growing industries and roles that align with your goals.
Financial planning is another critical step. Review severance agreements carefully, as terms may be negotiable. Apply for unemployment benefits promptly, manage stock options, and assess your 401(k) and health insurance coverage under COBRA. Examine your budget, reduce unnecessary expenses, and explore cost-saving opportunities like negotiating bills or canceling unused subscriptions.
Investing in yourself can also make a significant difference. With AI reshaping the job market, enhancing relevant skills can set you apart from competitors. Update LinkedIn with an “open to work” status, reconnect with professional networks, and prepare for interviews by practicing how to explain your layoff and emphasizing transferable skills.
By taking these steps, you can turn a challenging situation into an opportunity for growth and resilience. Whether through skill development, strategic networking, or careful financial planning, proactive measures can help you navigate the job search effectively and position yourself for future success.
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Originally published on Business Insider on 2/22/2026